A Big Change on Europe

I was going to write about Europe, the question that has so deeply split both main parties in the UK, for The Independent on Sunday today, but was distracted first by the comedy of “Euston, we have a problem” and then by Andrew Mitchell’s resignation.

So I wrote about how David Cameron resisted media pressure on Jeremy Hunt and Andrew Mitchell (I could have added the earlier example of Andy Coulson), and a fat lot of good it had done him. (Although, as the headline says, I think that Mitchell’s departure means that little lasting harm has been done.)

But Europe is more important. Not so much what David Cameron said about a referendum at Prime Minister’s Questions, surprising though it seemed, but what Michael Gove did not say in the Mail on Sunday last week.

Education Secretary Michael Gove has told friends that, if there was a referendum today on whether the UK should cut its ties with Brussels, he would vote to leave …

“Michael thinks it is about time we spelled it out, in simple words that even Brussels bureaucrats can understand, that we won’t tolerate this any longer. We have to tell them if they don’t return some of the important powers they have snaffled from us, we will leave. We have nothing to be scared of and he wants them to know that.

“We are a major trading nation and that gives us considerable bargaining power with the EU whether we leave – or stay in.”

What is so significant about that is not just the words themselves but that they have not been repudiated, either by Gove or by Cameron. As James Forsyth reminds us, it is not so long ago that John Major’s government was torn apart by the Prime Minister’s attempt to prevent ministers from ruling out the UK’s ever adopting the euro. Now, the Prime Minister is silent when a minister suggests that leaving the EU altogether would be desirable now and a serious option in future.

Yet the Prime Minister does not agree with his friend and colleague. This is no difference of emphasis. It is fundamental. “I do not want an in/out referendum,” Cameron told the Commons on Wednesday, “because I am not happy with us leaving the European Union, but I am not happy with the status quo either.” What he wants, he said, is “a new settlement with Europe and then that settlement being put to fresh consent” – which he has previously said could be a referendum or an election.

On the face of it, this was an ineffective response to Gove’s implied challenge. It would seem that Cameron proposes to negotiate a “new settlement” with the rest of the EU, having made clear at the start that he does not want to leave. This is as good an approach to bargaining as saying you will buy the house anyway, but could you have £5,000 off the price? Even Harold Wilson, when he and James Callaghan renegotiated terms in 1974-5, put the result to an in/out referendum – though they too had no wish to leave and their new terms were largely symbolic (something to do with making it easier to import New Zealand butter).

In fact, Cameron was merely restating his known views. He said bluntly at the end of June that he was opposed to an in/out referendum. That prompted headlines saying “Cameron rules out referendum”, which so threatened to destabilise the Conservative Party that he had to write an article for The Sunday Telegraph setting out his position, which was enough to allow the headline “Cameron opens door to referendum”, which calmed the Eurosceptic storm.

That article is worth re-reading. The essence of Cameron’s argument was this: “As a trading nation Britain needs unfettered access to European markets and a say in how the rules of that market are written. The single market is at the heart of the case for staying in the EU.” But he said that “whole swathes of legislation covering social issues, working time and home affairs should, in my view, be scrapped”, and he sees the reshaping of the EU forced on it by the euro crisis as a chance to scrap them. This reshaping could then be subject to a referendum, although the choice would be between the new terms and keeping things as they are.

By then, three important changes had happened to the British politics of Europe. The euro crisis itself and two of its consequences: the further integration of the eurozone core and the shift in British public opinion. Since 2010, public opinion has moved decisively against our membership of the EU. Our Comres survey today finds that 43 per cent agree that “the UK has nothing to fear from leaving the EU”, with only 29 per cent disagreeing.

However, until last weekend, no front-bench politician at Westminster has been identified with support for withdrawal for a long time. What makes it puzzling is that Gove is so close to Cameron, personally and politically. Yet the gap between his position and the Prime Minister’s is huge.

Threatening withdrawal cannot simply be a bargaining tactic – you have to mean it for the threat to be taken seriously. Gove would be taking quite a gamble on the willingness of the rest of the EU to offer us the kind of selective deal enjoyed by Switzerland if we left. He said, or, rather, he is said to have “told friends” that “we are a major trading nation” and so the EU would, rationally, want to allow us access to its market and vice versa.

But that does rather assume that they would respond well to having their European idealism insulted by our flounce. EU membership remains the mainstream business view.

A premonition of Conservative difficulties to come was offered by Philip Hammond, the Defence Secretary, on Andrew Marr’s programme last Sunday. He was asked about Gove’s undenied view:

What Michael is reflecting, and many of us feel, is that we are not satisfied with the current relationship between the EU and the UK. The balance of competencies is not right … Nearly 50% of our trade is with the European Union … so it makes sense for Britain to be in the single market but to re-set the relationship so that we have a balance of competencies between Europe and Britain, which works for Britain and the British people.

He, then, is with Cameron. Stay in and “re-set” the relationship, rather than threaten to leave and renegotiate. What a shame Michael Gove wasn’t asked to elaborate his view on Sky News today.